NextEnergy Newsletter Vol. 2 - No. 2

SUMMER 2008 | Vol. 2 | No. 2

With focused planning and a lot of effort Michigan CleanTech businesses and entrepreneurs can get to the front of the line and benefit enormously from a newly passed federal bill and newly passed federal Senate budget, both championed by U.S. Senator Debbie Stabenow (D-MI). The bill I refer to is the Food Conservation and Energy Act (H.R. 2419 aka The Farm Bill) which makes alternative energy installation, generation and use a priority, including wind, ethanol production, biomass, and anaerobic digester technologies. The Senate budget is Senator Stabenow's Green Collar Jobs Initiative, which passed through the Senate Budget Committee, of which Senator Stabenow is a member, for fiscal 2009.

Senator Stabenow wants nothing less than to make Michigan a National Leader in the Green Economy. But we in Michigan must want that leadership for ourselves. She is providing the tools … but we must provide the action.

We must lead ourselves.

The Green Collar Jobs Initiative, authorship of which was led by Senator Stabenow, is a $3.5 billion initiative designed to advance our nation's economy in six key areas. Here's the breakdown:

• Energy Efficiency and Conservation – this includes developing programs to educate consumers, businesses, and institutions on how to conserve energy, developing and implementing new energy efficiency technologies, and training a workforce to assess, advise, and correct inefficient energy use in buildings, transportation programs, and regions.
• Advanced Batteries; to increase research and production of advanced battery technologies on our shores … Senator Stabenow wisely points out that swapping our reliance on foreign oil for reliance on foreign-produced batteries does not improve our national security one bit. The batteries that power our vehicles in the future must be made in the USA.
• Retooling Old Manufacturing Plants; the future of transportation manufacturing is hybrids, plug-in hybrids, advanced diesel, smaller engines, and other revisions to the old model of vehicle development. This portion of the budget can bring many of our older plants on line for these new products.
• Biofuel Production and Access; the winning combination will be hybrid vehicles powered by batteries for short trips and cellulosic ethanol or biodiesel for longer trips, and the biofuels grown from non-food crops on land unsuitable for food production in the answer. Michigan's plentiful agricultural resources and the scientists who know them best can be funded with this initiative to take the lead in biofuel development.
• Green Jobs Training; it is estimated that as many as 1 in 4 jobs in the 21^st century will emerge from clean energy creation, use, and monitoring along with energy efficiency developments. This funding includes competitive grants to non-profits and private partnerships to train workers that will lead to an expanded energy efficiency and renewable energy industry workforce.
• Restore Proposed Cuts to Energy Efficiency/Renewable Energy; President Bush has proposed cutting funding for energy efficiency and renewable energy development. This Budget restores this funding, making critical investments in solar, geothermal, biomass, hydrogen, and weatherization assistance.

In addition, Senator Stabenow is pushing for oil industry subsidies to be shifted into other sectors, such as alternative and renewable energy development. The tide is shifting. But we, as a state, have to be ready to take advantage of this sea change.

Between the Farm Bill, the new Senate Budget, and the possibility of oil subsidies being rerouted to alternative energy development, our state has unprecedented entre into the CleanTech sector, thanks to Senator Stabenow and her allies.

Okay, Michigan, that's what's on the table. That's where the opportunities are. Now it's up to us to come up with the responsible business plans that can regrow our state's economy in this green sector. We have to get smart. Do our research. Learn about the competition (other states, countries) and come up with better mousetraps.

This is what Michigan has done before. With fur. With lumber. And with automobiles.

With continued diligence in the clean energy space, we can do it again.

Jim Croce
CEO NextEnergy

With fuel prices skyrocketing truckers are feeling as much pain as anyone, but A.D. Transport Express, a Canton, Michigan-based transport company has found some relief in the idle reduction technology recently tested in their fleet through a Michigan Department of Labor and Economic Growth grant administered by NextEnergy. A.D. Transport's Director of Quality, David J. Konopka believes Idle Reduction technology is going to be necessary, not only for the environment, but for industry survival. "With oil currently priced at over $132/barrel, and diesel prices soaring near $5/gallon, carriers are going to get eaten alive by their own fuel bill. A typical tractor can burn as much as a gallon of diesel fuel per hour while idling. Once we recognized the financial and environmental impacts of idling, we began looking into idle reduction technology. NextEnergy and Smartway/EPA were a tremendous help in this endeavor." Idle reduction technology, such as Auxiliary Power Units (APUs), permit a vehicle's engine to shut down when stopped while still providing auxiliary power, such as heating and air conditioning, to the driver. A.D. Transport selected an APU provided by Thermo King and estimate that they achieved over $9,000 in fuel savings per vehicle per year. With over 200 vehicles equipped with idle reduction technology, fuel savings could top $1,800,000 per year. For more information contact David Konopka at dkonopka@adtransport.com.

Michigan's University Research Corridor (URC) consisting of the state's three leading research universities; Michigan State University, Wayne State University, and the University of Michigan, have announced seed fund grants to provide startup support for two "revolutionary but feasible" energy projects. The first project is to develop far more efficient low-cost thermoelectric materials with industrial applications. The second project is to develop revolutionary nano-biocarriers to rapidly and efficiently produce cheaper, more plentiful ethanol from switchgrass or corn stover (the leaves and stalks that make up about half of a corn crop). Production facilities would require a much smaller footprint than current ethanol plants. The universities together have committed $900,000 to these two projects. The universities are also developing technology for lithium-ion batteries, hydro energy, wind energy, and fuel cells, among other initiatives.

On April 22^nd, WWJ NewsRadio 950 hosted an Earth Day forum entitled "Embracing A Green Michigan: Carbon Culture At The Crossroads" featuring a diverse panel of experts including NextEnergy's Jim Croce, Skip Pruss, Special Advisor to Michigan Governor Jennifer Granholm on Alternative Energy and the Environment, Prof. Stephen Forrest, Vice President of Research for the University of Michigan, Randal Charleton, Director of WSU's TechTown, and Soji Adelaja, Land Policy Institute Director, Michigan State University. Additional speakers from the business sector included Mary Beth Stanek, Director of Energy and Environmental Policy for General Motors, Ray Siada, Corporate Energy Manager for Guardian Industries, Paul Savage, CEO of Nextek Power, Ronald Krupitzer of the American Iron and Steel Institute, and Aaron Crumm, Co-founder of AMI Adaptive Materials.

The focus of the daylong session, which was attended by over 200 Detroit area stakeholders, was explaining how Michigan must move its manufacturing efforts, its corporate efforts, and its policy toward a future based not on 20^th century manufacturing and consumerism, but on 21^st century entrepreneurism and engagement with the consumer on a whole new level of energy efficient living. Passage of the job-creating Renewable Portfolio Standard is seen as key to this transition. The challenge is to time the transition of Michigan businesses from being "carbon criminals" to "carbon angels" appropriately in order to maintain profitability from the end of one era to the beginning of the next. For more information about "Embracing a Green Michigan: Carbon Culture at the Crossroads" please visit wwj.com.

NextEnergy's Operations Group, led by COO David McLean, travelled to Arlington, Virginia and Washington, D.C. in April for a Technical Exchange Meeting at the Defense Energy Support Center 2008 Worldwide Energy Conference. More than 750 Air Force, Army, Navy, Marine, Coast Guard, and Federal organizations were represented at the Conference. The NextEnergy team, including McLean, Max Dorflinger, Kelly Jezierski and Ryan Smith met with leaders of the Defense Logistics Agency and other military personnel and discussed several of technical products programs that NextEnergy manages, including NextEnergy's Electronic Power Control & Conditioning (EPCC) Module, the Renewable Energy Mobile Utility System (REMUS), Mobile Encampment Waste to Electrical Power System(MEWEPS) and the Cellulosic Biofuels from Plant Products (CBPP) pilot project. Each of these projects has immediate application in the military environment and were reviewed with keen interest by numerous federal stakeholders. NextEnergy had a booth at the event and shared information on some of our federally-funded programs, many with military applications. For more information about EPCC, REMUS, MEWEPS, and CBPP please contact Kelly Jezierski at NextEnergy.

NextEnergy is pleased to share the following CleanTech business competition opportunity with our readership. To help move clean energy technologies from the laboratory to commercial production, DTE Energy has joined with the University of Michigan to conduct an annual entrepreneurship competition that will challenge teams from Michigan colleges and universities to develop the best plan for bringing new clean-energy technologies to market. DTE Energy Chairman and CEO Anthony F. Earley Jr. announced the creation of the DTE Clean Energy Prize at the company's annual meeting.

"Our goal is to drive promising clean energy ideas and technologies from the research lab to commercialization," Earley said. "To do that, we are making a five-year, $450,000 commitment to fund the DTE Clean Energy Prize, a new competition open to the best and brightest students and faculty at Michigan's colleges and universities."

The prize pool for the 2009 competition will be $100,000, which will be divided among the winning teams. For subsequent years, it is expected that the prize pool will be $200,000. The prize competition will be hosted by the University of Michigan, but will be open to students and faculty from all Michigan colleges and universities. For the first year, each team must have at least one University of Michigan student or faculty member. The competition will require that teams focus on business ideas that support renewable energy, energy efficiency and demand response, greenhouse gas and environmental control technologies and energy storage.

Application forms, deadlines and other information will be posted on the DTE Clean Energy Prize Web site. To reach that site, visit www.dteenergy.com and search for Clean Energy Prize.

In speeches and presentations to organizations and audiences ranging from the Society of American Engineers (SAE) to the Center for Automotive Research, to the Electric Drive Transportation Organization and others NextEnergy leaders Jim Croce, Jim Saber, and Mark Beyer have been bringing the Vehicle To Grid message to the forefront of the conversation. It is NextEnergy's belief that Vehicle To Grid (V2G) technology is among the long term solutions to our nation's energy and national security challenges.

V2G technology starts with large consumer acceptance of Plug In Hybrid Electric Vehicles (PHEVs) that are now not far from commercialization. The PHEV has both a fossil fuel powered internal combustion engine supplemented by an electric motor. The car runs on gas or diesel fuel for long distances (which recharge the batteries) and on electric power for shorter distances. The capstone of V2G success is that the PHEV also has the capacity to add power to the grid during outages or peak load times, thus relieving pressure on the grid, decreasing demand, lowering prices, and reducing harmful carbon emissions.

And it all starts with the Plug In Hybrid Electric Vehicle. The goal is to create vehicles that can go 40 to 50 miles on a day's battery charge … which is technologically attainable once issues of weight, etc, have been resolved. This should have broad appeal since 70% of Americans drive less than 40 miles per day.

The challenge then becomes: how do these hybrid electric vehicles interface with the grid technically, commercially, and economically? And the answers lay within what the utilities call real time electric rate-paying, or "SmartGrid technology." Where you only pay for the electricity you use, and are, in fact, rewarded or rebated with electricity you add to the grid through your vehicle. Extraordinary research and development is going on in SmartGrid and Vehicle To Grid Technology at NextEnergy now with projects that team the U.S. Department of Energy, the U.S. Department of Defense, DTE, Rolls Royce, Southern California Edison, EPRI (the Electric Power Research Institute in Palo Alto) as well as Ford, GM, Chrysler, Toyota, Honda, Volkswagen, the other automakers. The Michigan Public Service Commission recently issued an Energy Efficiency Grant RFP for a comprehensive PHEV research and development project within this state, and to which DTE, GM, and NextEnergy, among others, have responded. To learn more about PHEVs and V2G visit www.google.org/recharge.

With retrofitted buses that reduce harmful emissions, NextEnergy helped four school districts provide cleaner air for 180,000 Michigan schoolchildren to breathe. The U.S. Environmental Protection Agency provided funding to NextEnergy to help local school districts retrofit older school buses to decrease diesel exhaust exposure for thousands of Michigan school children. Diesel exhaust emissions have been proven to contribute to air pollution and are linked to asthma in both children and adults. The EPA Clean School Bus Program provided $95,000 in grant funding through NextEnergy in late 2006 for a school bus retrofitting program which was recently completed in four Michigan school districts: Howell Public Schools, Hartland Consolidated Schools, Hamilton Community Schools and Edwardsburg Public Schools. Nearly 70 buses have been retrofitted in these districts and help ensure that school buses are the cleanest possible transportation for this generation of school children. Cummins Bridgeway provided equipment and NextEnergy facilitated the installation of an EPA-approved diesel oxidation catalyst (DOC) on 68 older buses in the four school districts. EPA data indicates that each DOC installed can reduce particulate matter pollution anywhere from 20 to 90 percent per bus. The total value of the project is $115,000, shared by the EPA, local school districts and NextEnergy. These four school districts combined, provide daily transportation for more than 188,000 school children.

Each of the four participating school districts were recognized for meeting the Clean School Bus USA requirements at a breakfast hosted by NextEnergy in Detroit on May 15^th, 2008.

ilumisys, the Troy, MI-based LED lighting company that is developing LED-based replacements for flourescent bulbs has a pilot project underway at a state office building in Escanaba, Michigan. Over the next four years, Ilumisys Inc. will replace 200 flourescent tubes in the building with three successive generations of LED lamps. The first generation of the lamps are 5 to 10 percent more energy efficient than flourescent bulbs, and last more than 25 years, vs. flourescent tubes' estimated five-year lifespan. They also don't require ballasts or use mercury, and can be dimmed or brightened to accommodate available natural light. ilumisys lights are also currently installed now on the fourth floor of Ann Arbor (Michigan) City Hall. ilumisys is a subsidiary of Altair Engineering Inc.

The Michigan Climate Action Council (MCAC) was convened as an advisory body to the Michigan Department of Environmental Quality in December 2007 to identify opportunities in Michigan to respond to the challenge of global climate change while encouraging energy efficiency, becoming more energy independent, and spurring economic growth. The MCAC has identified opportunities for reducing Greenhouse Gas Emissions (GECs) in every sector of the economy. Serious efforts to implement action to address climate change will have positive effects on our state's economy. Recognizing these effects, the MCAC has identified five tenets for developing a statewide strategy to mitigate climate change:

• All sectors (government, industry, services, agriculture, consumers, higher education, etc.) must be involved. The actions must be broad-based and inclusive.
• The geography, natural resources, energy sources, and economic base of Michigan, as well as the Midwest, must drive the decisions. In addition, consideration will be given to actions and decisions made by other Midwest states and regions.
• Preference should be given to actions that have multiple benefits, such as reducing energy consumption while improving air quality and reducing GHG emissions.
• The strategy must include short-term, mid-term, and long-term actions that can realize reductions in a relatively short period of time while also providing more lead time for the development and efficient implementation of other reduction measures.
• The strategy development process must evaluate and consider economic and environmental impacts, including the implementation costs or cost savings for individuals, communities, businesses, and jobs in Michigan.

In developing the climate change strategy, the MCAC will take into account and make its recommendations based on what is best for Michigan. The MCAC also recognizes that collaboration and education are key strategies to a successful implementation of the state's climate change strategy. The final report and strategy recommendations will be delivered to Governor Jennifer Granholm by December 30^th, 2008. For more information about the Michigan Climate Action Council please visit miclimatechange.us.

IBERDROLA RENEWABLES is pursuing developing a wind farm in Southwestern Michigan. The company currently has more than 2,000 megawatts of wind power in operation in the United States with the goal of bringing online another 1,000 megawatts in the US each year between 2008-2010. To date, the company has installed nearly 500 MW of wind capacity in the U.S. Mid-Continent region and more is under construction now. Dickinson Wright PLLC is assisting IBERDROLA RENEWABLES with Michigan issues related to this project. Operating in 19 countries, IBERDROLA RENEWABLES is the world's largest supplier of renewable energy and part of the IBERDROLA S.A. group of companies, the world's fourth largest electricity company. Worldwide, IBERDROLA RENEWABLES had 8,164 MW of installed renewable energy capacity on March 31, 2008 and a project pipeline of 42,000 megawatts, half of that in the US. The company's goal is to have installed a total of 13,600 MW of wind power worldwide by 2010. Michigan is making strides towards improving its regulatory framework to facilitate investments in renewable energy, but certain matters and policies remain to be addressed. One such policy relates to the interpretation by the Michigan Department of Agriculture of the Farmland and Open Space Preservation Act ("Act 116") as to whether land subject to a Farmland Development Rights agreement can be used for a wind power generator and related improvements. The Department has a policy that limits the ability to place a wind power generator on Act 116 land to placement "via an easement" by a "public utility as designated by the Public Utility Commission." According to Jack Dempsey, a Dickinson Wright energy practice attorney who specializes in administrative law, the policy, which appears to have been developed without coordination with the Michigan Public Service Commission, may unnecessarily raise issues that could unduly limit the development of wind power within the state of Michigan. Mr. Dempsey is currently working with the Michigan Public Service Commission, the Department of Agriculture and the Michigan Attorney General's office to clarify the policy to facilitate the development of wind power in Michigan. For further information regarding Dickinson Wright's energy and sustainability practice group, please contact Meg Coughlin via e-mail: mcoughlin@dickinsonwright.com.

From June 1^st through June 4^th, NextEnergy's Vice President/Director of Industry Services Dan Radomski attended the 2008 American Wind Energy Association (AWEA) conference in Houstonwith the express desire of connecting large wind OEMs such as GM, Vestas, Siemens, and others with Michigan's able and expanding wind manufacturing supply chain. With approximately 8000 precision parts required for every wind turbine, the skillsets found in Michigan's workforce have clear market opportunities in the wind sector. Highlights of the conference include:

• Danish-headquartered Vestas, the world's leading manufacturer of wind turbines, has selected Houston, Texas for their R&D Center location.
• Siemens has also established an R&D Center in the U.S., in Boulder, CO.
• Several of the world's largest wind turbine companies are planning nacelle assembly operations in U.S. All will likely select Midwest locations.
• NextEnergy secured commitments from several large turbine OEM’s for supplier match making events to be conducted over the next few months in Michigan, the first being GAMESA, which will come to NextEnergy over the summer months.

Opening Session remarks by AWEA Executive Director Randall Swisher included these facts:

• The U.S. installed over 5,000MW of wind power in 2007, double that of 2006
• AWEA just released a "20% Wind Energy by 2030 for US" Roadmap Report:
  • Over 500,000 jobs are expected to be created in the wind industry
  • Transmission must be improved/upgraded
  • We need to grow the U.S. manufacturing supply chain to keep up with demand

Amanda Roraff: Amanda Roraff joins NextEnergy as an independent consultant to guide the Industry Services division on various projects. She brings with her over 12 years of experience in the non-profit, manufacturing and association industries. Amanda has a strong background in needs analysis, detailed planning and proactive problem solving. Amanda enjoys spending time with her two children, ages 5 and 7, and her husband, Dave, boating on Lake St Clair. Welcome, Amanda!

The 2008 Michigan Clean Transportation Gala, sponsored by NextEnergy and the Detroit Area Clean Cities Coalition, is presenting an Expo and Awards ceremony at the Rock Financial Showplace on September 24^th from 4:00 to 9:00 p.m. Highlights will include exhibits featuring the latest clean transportation technology available for fleets of all sizes, along with entrepreneur and investor networking and keynote speeches on topics of interest in this fast expanding field. Several sponsorships are still available and nominees for awards are being sought in the following categories:

1. Energy Independence Awards
2. Small Business Clean Transportation & Leadership Awards
3. Corporate Clean Transportation Leadership Award
4. Clean Transportation Technology Innovation Award
5. Alternative Fuel Supplier of the Year
6. Biofuel Producer of the Year
7. Public Fleet Manager of the Year
8. Private Fleet Manager of the Year
9. Clean City of the Year
10. Michigan Clean Transportation Community Leader Award

RoMan Manufacturing, based in Grand Rapids, MI, and its subsidiary RoMan Engineering in Madison Heights, MI, bring expertise not only to the manufacturing and installation of advanced welding transformers and equipment (to clients such as Ford, GM, Chrysler and others) but also to the energy efficient operation of said machinery. RoMan Manufacturing is the only welding transformer manufacturer in the entire United States.

Roman Engineering has emerged into the marketplace as a leading expert consultant in devising energy efficiency practices for all resistance welding operations.

As RoMan's Tom Morrisett puts it, "In the old days all the customer needed was a good weld. Now there are other considerations; lower cost combined with equipment that can be considered green."

RoMan Engineering Vice President and electrical engineer Mike Soter describes how RoMan can create value for large scale welders, "When current goes up on the primary (load) as the welds occur, this activity makes the current on the neighbor load go down and fluctuate. This adversely affects all the other machines within the facility. Lights and computers flicker and suffer and quality control problems arise. That's when they call RoMan Engineering. We solve these and other problems. Now there are so many choices … AC or DC or One Phase or Three Phase and we find the best solution. We show companies how to modify their electrical system to optimize each machine."

Concentrating on welding and glass manufacturing, RoMan Engineering diagnoses the facilities hardware configuration from the welding tips all the way back to the distribution source and how it positively or negatively affects the facility's energy efficiency.

To learn more about RoMan Engineering contact Mike Soter at 248-585-5540 or at mikesoter@romaneng.com.

Please go to www.nextenergy.org to:

• Join our Supplier Networks
• Use our Fleet Processing Tool.
• Access our Hydrogen Codes & Standard Database
• Consult our RPS/Economic Impact Study for Michigan
• Learn about Testing & Validation Services of our MicroGrid and Alternative Fuels Platform
• Get information on Hydraulic Hybrid Technology

The Michigan Clean Transportation Expo & Awards Gala 2008

Date:

Wednesday, September 24^th, 2008

Location:

Rock Financial Showplace, Novi, MI

Topic:

The Michigan Clean Transportation Expo & Awards (MCT) brings together Michigan's public and private sectors in support of the state's burgeoning clean transportation industry. Whether your interest is in biofuels, heavy or light duty vehicles, hybrids, what's new in pending legislation, or the latest in fuel cell technology, MCT has what you are looking for!

Registration:

Please visit www.mct-expo.com to register, become an exhibitor or sponsor, or nominate someone for an industry awards.

National Association of Seed and Venture Funds (NASVF) 15^th Annual Conference:

Date:

September 10-12, 2008

Location:

the Detroit Marriott Renaissance Center, MI

Hosted by:

Michigan Economic Development Corporation

Topic:

Detroit is reinventing itself as a technological hub for the 21^st century and is a fine example of how targeted investment can spur growth. More than 300 of the industry's top innovation capital providers will attend the conference this year.

Registration:

To register for this important conference, go to www.nasvf.org/conference.

Michigan Business Review’s Innovation

Date:

September 17^th, 2008. 10:30 a.m. to 2:00 p.m.

Location:

Eastern Michigan University Convocation Center
799 North Hewitt Road, Ypsilanti, Michigan 48197

Topic:

In conjunction with the Washtenaw Economic Club and featuring Thomas Friedman, author of "Hot, Flat and Crowded," Michigan Business Review's Innovation will highlight Michigan’s alternative energy development and most innovative company in Michigan will be awarded. Business Review is accepting ideas for nomination at innovation@mbusinessreview.com.

Registration/Contact:

For information on sponsorship, nominations, and registration, please contact Karen Koziel at 734-302-1719 or karenk@mbusinessreview.com.

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